Blogs

Legalization of gambling has become an incentive for the development of about twenty related sectors of the economy

The gambling business became legal in our country only a year and a half ago following more than 11-year break.

Since the entry into force of the Law of Ukraine “On the State Regulation of Activities Concerning Organization and Conduct of Gambling” No. 768-IX, the Ukrainian gambling industry has entered a new phase and has become a catalyst for the development of related economy sectors.

All over the world, the legalization of gambling is one of the transformational public administration reforms, since this field has several priority functions. The economic function is the key one, because the gambling industry stimulates the development of related economy sectors.

Ukraine is no exception. It fully mirrors the road taken by numerous civilized countries, where the gambling market growth was followed by increasing business activity in many sectors.

Here is a list of some of them:

1. Consulting, namely the provision of paid qualified assistance to gambling organizations in external assessment of current activities, analysis of business processes and provision of recommendations for conducting and improving business.

2. Legal services, that is, services of legal nature, namely preparation and examination of documents, communication with inspection bodies, and legal protection of interests in case of disputes.

3. Recruitment, namely search and adjustment of company personnel.

4. Housing rental. The law states that gambling establishments must be located in regulated places, namely 3-, 4- and 5-star hotels, on the territories of suburban recreation complexes and in special gaming areas determined by the Cabinet of Ministers of Ukraine.

5. Design, construction and repair. The gambling business provides funding for the renovation of hotels and other relevant premises in order to get a license.

6. Gambling equipment production. Gambling operators procure gambling equipment, that is, invest in the development of this sector.

7. IT, software production and maintenance. Many gambling companies have already introduced technology solutions.

8. Marketing, advertising and PR. In 2021 alone, the advertising market in general and some categories in particular demonstrated double-digit growth by attracting funds to the creative industry and media.

9. Sponsorship contracts, that is, multimillion-dollar contracts in support of national federations, teams, and individual athletes.

10. Consumer industry, namely design, tailoring, and procurement of uniforms for personnel.

11. Event marketing, namely carrying out large-scale events relating to the brands of gambling companies.

12. Restaurant business, namely expansion of restaurant business services both in gambling establishments and, due to the influx of tourists, in cities where land-based gambling establishments are located.

13. Charity. Numerous gambling companies act as active sponsors of various public and local charitable foundations.

Owing to the increase in business activity in these industries alone, the experts believe that in 2021 the cumulative economic effect from the legalization of gambling amounted to more than UAH 30 billion, not taking into account direct national budget revenues from license fees in the amount of about UAH 1.7 billion.

Thus, the overall growth in various business sectors, which took place last year due to the legalization of gambling, will continue in 2022, since the modern gambling market in Ukraine was launched less than two years ago, and it is just waiting for the opportunity to become fully operational once the tax issue is resolved.

The Ukrainian budget will accrue even higher revenues after the adoption of draft law 2713-д by the Verkhovna Rada of Ukraine.
Viktoriya Zakrevskaya